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Icard Merrill legal malpractice lawsuit to proceed

Published: Tuesday, March 26, 2013 at 1:00 a.m.

Last Modified: Monday, March 25, 2013 at 8:06 p.m.

The Icard Merrill law firm had hoped to put a quick end to a malpractice suit filed by the Federal Deposit Insurance Corp. against one of its top attorneys, Robert Messick.

But U.S. District Court Judge Virginia Hernandez-Covington's March 15 ruling on the firm's motion for summary judgment not only denied that request, it also removed the expectation that the case might wither away.

In her ruling, the judge said she had concluded that a "reasonable" juror could find Messick guilty of the FDIC's accusations against him.

"Under the undisputed facts before the court, a jury could find that the defendants committed legal malpractice," Hernandez-Covington wrote.

Dennis Waggoner, a Tampa attorney who represents Messick and Icard Merrill, said the judge's ruling simply means that the case will now proceed to trial sometime in May.

"It's extremely difficult to get a summary judgment," Waggoner said. "We're disappointed, but we're ready to move ahead and show a jury that Bob Messick and Icard Merrill did absolutely nothing wrong when representing First Priority Bank."

The FDIC sued Messick and Icard Merrill in December 2011 in connection with a $5.3 million loan that the now-defunct First Priority Bank made to a company led by former Longboat Key real estate investor Mark Brivik during the boom.

Brivik was trying to develop a 22-acre property along the Upper Manatee River, and its lender -- Siesta Key-based US Funding Group -- was putting pressure on him to pay off an existing $4.3 million loan.

With Messick's help, Brivik secured fresh funding from First Priority. But Brivik's company ended up defaulting 18 months later.

After shuttering First Priority, the FDIC accused Messick of breaching his fiduciary duty by failing to inform the bank's board of directors that he also represented Brivik and US Funding in the loan transaction. According to the FDIC's lawsuit, the conflict of interest allegedly prevented Messick from providing unbiased counsel to the bank.

"A reasonable juror could determine that when Messick should have had the bank's best interest in mind, he was actually acting at the behest of other entities -- constituting a breach of fiduciary duty," Hernandez- Covington stated in her March 15 order.

The FDIC also claimed that Messick failed to advise First Priority's board that an option to buy another 25-acre parcel of land -- part of the bank's collateral for the loan -- did not exist.

In October, Waggoner filed a motion for summary judgment, arguing the case should be dismissed because the allegations in it were false.

"Undisputed evidence" shows that Messick told the bank about his conflict of interest and obtained a waiver, Waggoner stated in his motion.

Waggoner said that principal decision-makers at the bank -- the chairman, chief executive and senior loan officer -- all testified they knew the option to buy the 25-acre parcel was limited to a "right of first refusal."

The executives never considered the additional land when they voted to approve the loan, Waggoner said in his motion.

"According to the bank witnesses with personal knowledge of the underlying facts, the bank would have made the loan regardless of whether it was secured by an option to purchase additional property," Waggoner wrote.

But Hernandez-Covington rejected the defendants' claims and ruled that the matter should be decided by a jury.

"Messick acknowledges and the record reflects that the Icard firm represented Brivik and US Lending; but it appears that Messick did not disclose the same to" First Priority's senior loan officer, Stephen Putnam, the judge wrote in her order.

"It is not clear from the record what Messick disclosed to Putnam regarding his conflict of interest," the judge said. "If anything, Messick has provided testimony that is at times confusing and divergent regarding who he represented and when."

Hernandez-Covington noted that in a June 19, 2012, deposition, Messick testified that he represented only First Priority. But in sworn testimony from May 18, 2009, Messick said he represented the bank and the borrower during the relevant loan closing.

Messick also testified that he sought a conflict waiver from Putnam, though the bank official said under oath he did not recall whether Messick discussed any conflict of interest with him, Hernandez-Covington said.

Hernandez-Covington pointed out a similar ambiguity regarding the option parcel. Messick testified that he called Putnam by phone to advise him the option on the additional acreage did not exist, and that Putnam waved the requirement that the parcel be considered collateral.

But Putnam testified that he did not recall waiving the requirement, Hernandez-Covington wrote.

The judge also referred to Putnam's statements that, as a member of the bank's seven-member loan-approval committee, Putnam did not have the authority to alter the terms of the loan unilaterally.

"Although Messick testified that he orally advised Putnam that the option did not exist, a jury could find that more than a phone call was required," the judge wrote.

<p>The Icard Merrill law firm had hoped to put a quick end to a malpractice suit filed by the Federal Deposit Insurance Corp. against one of its top attorneys, Robert Messick.</p><p>But U.S. District Court Judge Virginia Hernandez-Covington's March 15 ruling on the firm's motion for summary judgment not only denied that request, it also removed the expectation that the case might wither away.</p><p>In her ruling, the judge said she had concluded that a "reasonable" juror could find Messick guilty of the FDIC's accusations against him.</p><p>"Under the undisputed facts before the court, a jury could find that the defendants committed legal malpractice," Hernandez-Covington wrote.</p><p>Dennis Waggoner, a Tampa attorney who represents Messick and Icard Merrill, said the judge's ruling simply means that the case will now proceed to trial sometime in May.</p><p>"It's extremely difficult to get a summary judgment," Waggoner said. "We're disappointed, but we're ready to move ahead and show a jury that Bob Messick and Icard Merrill did absolutely nothing wrong when representing First Priority Bank."</p><p>The FDIC sued Messick and Icard Merrill in December 2011 in connection with a $5.3 million loan that the now-defunct First Priority Bank made to a company led by former Longboat Key real estate investor Mark Brivik during the boom.</p><p>Brivik was trying to develop a 22-acre property along the Upper Manatee River, and its lender -- Siesta Key-based US Funding Group -- was putting pressure on him to pay off an existing $4.3 million loan.</p><p>With Messick's help, Brivik secured fresh funding from First Priority. But Brivik's company ended up defaulting 18 months later.</p><p>After shuttering First Priority, the FDIC accused Messick of breaching his fiduciary duty by failing to inform the bank's board of directors that he also represented Brivik and US Funding in the loan transaction. According to the FDIC's lawsuit, the conflict of interest allegedly prevented Messick from providing unbiased counsel to the bank.</p><p>"A reasonable juror could determine that when Messick should have had the bank's best interest in mind, he was actually acting at the behest of other entities -- constituting a breach of fiduciary duty," Hernandez- Covington stated in her March 15 order.</p><p>The FDIC also claimed that Messick failed to advise First Priority's board that an option to buy another 25-acre parcel of land -- part of the bank's collateral for the loan -- did not exist.</p><p>In October, Waggoner filed a motion for summary judgment, arguing the case should be dismissed because the allegations in it were false.</p><p>"Undisputed evidence" shows that Messick told the bank about his conflict of interest and obtained a waiver, Waggoner stated in his motion.</p><p>Waggoner said that principal decision-makers at the bank -- the chairman, chief executive and senior loan officer -- all testified they knew the option to buy the 25-acre parcel was limited to a "right of first refusal."</p><p>The executives never considered the additional land when they voted to approve the loan, Waggoner said in his motion.</p><p>"According to the bank witnesses with personal knowledge of the underlying facts, the bank would have made the loan regardless of whether it was secured by an option to purchase additional property," Waggoner wrote.</p><p>But Hernandez-Covington rejected the defendants' claims and ruled that the matter should be decided by a jury.</p><p>"Messick acknowledges and the record reflects that the Icard firm represented Brivik and US Lending; but it appears that Messick did not disclose the same to" First Priority's senior loan officer, Stephen Putnam, the judge wrote in her order.</p><p>"It is not clear from the record what Messick disclosed to Putnam regarding his conflict of interest," the judge said. "If anything, Messick has provided testimony that is at times confusing and divergent regarding who he represented and when."</p><p>Hernandez-Covington noted that in a June 19, 2012, deposition, Messick testified that he represented only First Priority. But in sworn testimony from May 18, 2009, Messick said he represented the bank and the borrower during the relevant loan closing.</p><p>Messick also testified that he sought a conflict waiver from Putnam, though the bank official said under oath he did not recall whether Messick discussed any conflict of interest with him, Hernandez-Covington said.</p><p>Hernandez-Covington pointed out a similar ambiguity regarding the option parcel. Messick testified that he called Putnam by phone to advise him the option on the additional acreage did not exist, and that Putnam waved the requirement that the parcel be considered collateral.</p><p>But Putnam testified that he did not recall waiving the requirement, Hernandez-Covington wrote.</p><p>The judge also referred to Putnam's statements that, as a member of the bank's seven-member loan-approval committee, Putnam did not have the authority to alter the terms of the loan unilaterally.</p><p>"Although Messick testified that he orally advised Putnam that the option did not exist, a jury could find that more than a phone call was required," the judge wrote.</p>